Last year, Sprint’s CEO Marcelo Claure famously said that in two years his company will have the number one or number two ranking, in terms of networks, in about 80% of the metro areas in the US. This morning, the company put out their earnings for the quarter and their 2015 fiscal year. While the numbers do look good in some categories, they are still needing to cut costs elsewhere. In fact, they are planning to cut capital spending in the 2016 fiscal year from $5 billion to $3 billion. Which indicates that Sprint is looking to save some money – and keep from going bankrupt – rather than investing in their future, which is always going to be their network. Part of the reason for Sprint lowering their spending for the new fiscal year has to do with the issues they’ve had in getting zoning for their new poles they are putting up. Sprint is heavily utilizing small cells to bolster their network, which requires zoning and permits.
On the earnings call this morning, Claure was asked about the network and his goal to be in the top 2 by May 2017. He stated that is still the goal for him and his team. Adding that they are “determined to reach that” goal. In the past year, it’s been clear that Sprint has made some headway with their network in some areas. But in many areas, they are still last. A wireless network is something that takes months and even years to fix. So it’s not surprising that they aren’t one of the top two networks already, after a year has passed.
The company did add 1.2 million customers in the 2015 fiscal year, with 56,000 coming in the fourth quarter. Not as many customers as analysts were expecting the company to add. But they did add customers nonetheless. For the fiscal year, they posted a loss of $2 billion, which is down from $3.3 billion the year before. That’s all part of the cost-cutting measures that Sprint has been using recently.
New Street Research analyst Jonathan Chaplin did note that he believes “the goal is to keep the company solvent with the hopes of merging with [T-Mobile US] in the future.” As many of you know, the regulators weren’t going for a Sprint and T-Mobile merger, which left SoftBank with the decision of getting rid of Dan Hesse as the company’s CEO and putting in Marcelo Claure as the man in charge. Although they are likely going to be attempting to merge once again after the current regulators are out of office next year, when we get a new president (who appoints the five FCC commissioners).